Even before the pandemic, Holiday Lets were becoming a popular alternative for many property investors. With yields in excess of 10% and the fact that Holiday Lets fall outside of the recent reduction in Buy to Let mortgage interest relief, it is no surprise that many landlords have turned to holiday let investments.
The weak pound also attracted plenty of overseas holiday makers to the UK and with warmer summers we’ve seen more UK residents look closer to home for their annual break. Add to this Covid-19 and a reluctance by many to travel abroad and we can quickly see why Holiday Lets continue to increase in popularity.
As a result, more and more lenders are entering the Holiday Let mortgage arena. Mortgages are available up to 75% Loan to Value and interest rates start at around 3% but it is wise to speak to a specialist broker who can guide you through the various options available.
Some lenders will calculate how much they are willing to lend based on the projected holiday let income although in my experience, these lenders also require the comfort of additional income or wealth in the background. Other lenders will look to base the affordability on the market rent as if the property was let on a standard Assured Shorthold Tenancy (AST) agreement.
So, is your next investment a Holiday Let? If so, I would strongly recommend the following:
And good luck!!